Tether Preliminarily Estimates First Quarter Earnings at $700M

The Tether company preliminary estimates the profit for the first quarter of 2023 at $700 million, writes RBC Crypto with reference to CNBC. Thus, the total amount of excess reserves of the company exceeded $1.6 billion, Paolo Ardoino, CTO of Tether, told the publication.

Tether issues a stablecoin USDT, which is pegged to the US dollar. USDT reserves are held in fiat currencies and US Treasuries. Previously, commercial securities were included in the security of the token, but in October 2022, the company reported that it had completely withdrawn them from the USDT security.

Tether generates income through fees, investments in digital tokens and precious metals, and lending to other institutions.

In February, Tether reported that it made a profit of $700 million in the fourth quarter of 2022. The company’s total assets, after deducting liabilities, were $960.6 million at that time.

In the event that this year’s first-quarter earnings estimate is confirmed, the company’s excess reserves will reach $1.66 billion. According to Ardoino, this money will remain in Tether for further capitalization of the stablecoin.

USDT is the largest stablecoin in terms of capitalization, among all cryptocurrencies in this indicator it ranks third after bitcoin and Ethereum. As of March 24, the capitalization of the asset is $78.8 million. Since the beginning of March, it has grown by more than $7 billion – from $71.7 billion.

The growth of the capitalization of the Tether token takes place against the backdrop of problems with its largest competitor, the USDC stablecoin from Circle. The firm faced a significant outflow of funds from the asset following the collapse of Silicon Valley Bank (SVB), in which it held part of the reserves. USDC temporarily lost its peg to the dollar, and users rushed to get rid of it. Since March 10, USDC capitalization has decreased by $9.2 billion, from $43.7 billion to $34.5 billion.

Source: CryptoNewsHerald.com

Comments (No)

Leave a Reply